Eligibility of the United States-Israel Free Trade Agreement (IFTA) of classroom and children furniture, shipped from Israel directly to Mexico, and subsequently returned to the United States; “imported directly” requirement.

N276178 June 30, 2016 CLA-2-94:OT:RR:NC:N4:433 CATEGORY: Classification Humberto F. Orduno, LCB R.L. Jones Customhouse Brokers 8830 Siempre Viva Road, Suite 100 San Diego, CA 92154 RE: Eligibility of the United States-Israel Free Trade Agreement (IFTA) of classroom and children furniture, shipped from Israel directly to Mexico, and subsequently returned to the United States; “imported directly” requirement. Dear Mr. Urduno: In your letter dated May 27, 2016, on behalf of ECR4Kids, you requested an IFTA eligibility ruling, specifically pertaining to goods originating in Israel that must also fulfill the “imported directly” requirements as specified in General Note 8 of the Harmonized Tariff Schedule of the United States (HTSUS). ECR4Kids plans to source originating merchandise from Israel with the intention of selling the merchandise in the United States. The merchandise would be shipped from Israel directly to Mexico without entering the commerce of Mexico. ECR4Kids would immediately put the merchandise into storage without entering the commerce of Mexico in a warehouse wholly controlled by CRI 2000, a sister company of ECR4Kids. The merchandise would not be subject to any manufacturing or processing operations after its location for storage purposes in Mexico, except for the removal of the merchandise from the shipping containers and outer packaging in which it arrives at the warehouse, with the intent of repacking the merchandise into smaller cartons and the occasional relabeling of the merchandise, as appropriate. Thereafter, the merchandise will be shipped directly to the United States, entered for consumption in the United States, and shipped to ECR4Kids’ customers. You specifically inquire as to whether the “imported directly” requirement under the IFTA is satisfied based on the above scenario. We will assume for purposes of this ruling that the merchandise concerned is originating and that the documents to prove such originating status are maintained by ECR4Kids, subject to Customs and Border Protection (CBP) review. The “imported directly” requirement as specified in General Note 8, HTSUS, are defined in General Note 3 (a) (v) (B), HTSUS. General Note 3 (a) (v) (B), HTSUS, provides: Articles are “imported directly: for purposes of this paragraph if - - (1) they are shipped directly from the West Bank, the Gaza Strip, a qualifying industrial zone or Israel into the United States without passing through the territory of any intermediate country; or (2) they are shipped through the territory of an intermediate country, and the articles in the shipment do not enter into the commerce of any intermediate country and the invoices, bills of lading and other shipping documents specify the United States as the final destination; or (3) they are shipped through an intermediate country and the invoices and other documents do not specify the United States as the final destination, and the articles-- (I) remain under the control of the customs authority in an intermediate country; (II) do not enter into the commerce of an intermediate country except for the purpose of a sale other than at retail, but only if the articles are imported as a result of the original commercial transactions between the importer and the producer or the producer's sales agent; and (III) have not been subjected to operations other than loading, unloading or other activities necessary to preserve the articles in good condition. From the facts presented on the movement of the merchandise, we can emphatically state that the merchandise concerned is not “shipped directly” from Israel without passing through the territory of any intermediate country, as the furniture pieces travel directly to Mexico; under General Note 3 (a) (v) (B) (1) above, the furniture pieces do not meet the “imported directly” requirement. In turn, as we have received no invoices, bills of lading and other shipping documents specifying the United States as the final destination for the furniture pieces, the merchandise concerned does not meet the “imported directly” requirement, as specified in General Note 3 (a) (v) (B) (2) above. Taking into account the conditions of General Note 3 (a) (v) (B) (3) above, the furniture pieces do not meet the “imported directly” requirement, because the merchandise concerned does not remain under the control of the customs authority in the intermediate country, in this case Mexico, nor is it housed in a customs bonded warehouse located in Mexico, and nor is it maintained in a free trade zone declared and secured by or under governmental authority. See Headquarters ruling HQ 557937 dated September 29, 1994. Consequently, based on the facts presented on the movement of the furniture pieces, the merchandise concerned [does not] qualify for preferential treatment under the IFTA. Due to the fact that the merchandise concerned is not eligible for preferential treatment under the IFTA, this office will not provide a finding on whether the repackaging operation is merely a type of unloading and loading operation, not having entered the commerce of Mexico versus a manipulation of the merchandise concerned, having entered the commerce of Mexico. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Neil H. Levy at neil.h.levy@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division